Bradford and Bingley building society is back in the news once again. The lender, which was nationalised last year by the government due to its bad debts through “toxic” loans, has just announced more bad news on its secured loan book.

According to the latest figures, somewhere in the region of one in twenty homeowner loans and buy to let loans with the lender are now in a default situation and it is thought that this situation is likely to become even worse, with more borrowers building up large amounts of arrears on their loans.

Bradford and Bingley has had a high percentage of buy to let loans and adverse credit loans on its books in recent years, both of which are now considered to be areas of high risk when it comes to lending and it would appear that the problems of bad lending decisions in the past are making their presence felt, with around 5 per cent of all loans in default.

Bradford & Bingley’s chairman, Richard Pym, had announced recently that the number of borrowers who had three months or more arrears on their loan, had doubled from 2007 to March this year with the figure reaching 4.6 per cent of all loans with the society. He added “it’s now above 5 per cent and it will continue to deteriorate for the remainder of the year.”

The government bought out Bradford and Bingley’s homeowner loan book last year, with the Spanish bank Santander taking over the more profitable savings element of the society. Last week, Santander announced that the name of Bradford And Bingley would disappear from the high street altogether by the end of next year, with all its remaining branches being rebranded as Santander.